celebrity endorsements

PROJECT REPORT ON EFFECTIVENESS OF CELEBRITY ENDORSEMENT IN BUILDING BRANDS WITH SPECIAL REFERENCE TO FMCG SECTOR

BY AKSHAY ARORA IMBA

AMITY SCHOOL OF BUSINESS Amity University, Uttar Pradesh

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ACKNOWLEDGEMENT I acknowledge my utmost gratitude to Ms.geetanjali gulati faculty guide, for her special interest and generous guidance throughout the project work. I am indebted to all my respondents who despite their limitations and pressure on time gave me good response in filling up of questionnaire. I am thankful to my friends, family members and relatives for providing the support that I needed during my project. I sincerely hope that the labor I have put in making this project will be appreciated.

AKSHAY ARORA

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CONTENTS Acknowledgement

S.No.

Chapter Name Executive Summary

1

Introduction

2

Literature Review

3

Objective of Study

4

Research Methodology

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Suggestion & Conclusion

References

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EXECUTIVE SUMMARY

The project talks about the effectiveness of celebrity endorsement in building brands with special reference to FMCG sector. The first few pages talk about the introduction and objectives of the study. This is followed by details about FMCG Sector. This part consist of FMCG Introduction, Industry characteristics, Key Players, Salient Features and SWOT Analysis of the FMCG industry. Next comes the detail about celebrity endorsements in FMCG sector. This part consists of Introduction to Celebrity endorsements, why customers accept the celebrities, Uses of celebrity endorsements, Reasons why celebrity endorsement may not work, Benefits of celebrity advertisements and Theories of celebrity endorsement. Next comes the survey, the purpose of which is to find out uses of celebrity endorsement those translate into higher brand recall of FMCG Products and to understand the reason behind the attitudes of consumer towards all those FMCG Products which are endorsed by the celebrities. The last part consists of findings, conclusion and bibliography. The questionnaire has been annexed to the report.

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CHAPTER 1 INTRODUCTION

The society that we live in can not only be called secular or democratic, it should be more appropriately termed as over-communicated these days. There are around 130 television channels in India broadcasting over 3 million television commercials each year in India. The media-explosion can thus be easily demonstrated. Moreover, people forget 80% of the information in just 24 hours! 'Celebrity Endorsement' for the brand is solution to it. Celebrities are involved in endorsing activities since late nineteenth century. The advent of celebrity endorsements in advertising in India began when Hindi film and TV stars as well as sportspersons began encroaching on a territory that was, until then, the exclusive domain of models. Celebrity endorsement is an important tool which is able to influence Indian consumer buying behavior. In India, celebrities are being increasingly used in marketing communication by marketers to lend personality to their products. With the visual media becoming more popular the use of celebrities in the TV media has increased. Celebrities create headlines. Their activities and movements are being closely watched and imitated. What they endorse sell like hot cakes. It is not surprising therefore that using celebrities in advertisements has become common practice. In India especially, it is not difficult to look for the reasons as to why companies are increasingly using celebrities. Indians always love their heroes and heroines. Consumers like advertisements more if they are admirers of the celebrities in the advertisements. When a consumer likes the celebrity in the advertisement, he or she is more likely to accept what the celebrity says about the advertised product and therefore will develop more positive feelings toward the advertisement and the brand itself. Famous

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celebrities are able to attract attention and retain attention by their mere presence in the advertisements. In the midst of the advertisement clutter, the advertisements that celebrities endorse also achieve high recall rates. When people see their favored reference group members or celebrities in the advertisements, they pay more attention to them. Celebrities may also help reposition products. Products with sagging sales needs some boosting and in this, Indian celebrities can help by way of they endorsing the product concerned. Celebrity endorsements give a brand a touch of glamour and the hope that a famous face will provide added appeal and name recognition in a crowded market. In the battle for the mind, you get the customer excited by showing him a known face, and an effective demand is created. In short it helps increase the recall value of the brand. Celebrity endorsements are today seen as a powerful mechanism for brand awareness and sales. A host of celebrities including film stars, cricket and lately tennis icons have been endorsing a range of products from FMCG’s, automobiles to jewellery to apparel and watches. Several brands have also appointed celebrities as their brand ambassadors to continuously promote their brands and associate the brands with the excellence and attributes that the celebrities are associated with.

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INTRODUCTION TO FMCG INDUSTRY

India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million. The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in the economy with a total market size in excess of Rs 60,000 crore. This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday need of the population. Product Characteristics Products belonging to the FMCG segment generally have the following characteristics: •

They are used at least once a month

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They are used directly by the end-consumer

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They are non-durable

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They are sold in packaged form

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They are branded

India - a large consumer goods spender An average Indian spends around 40 per cent of his income on grocery and 8 per cent on personal care products. The large share of fast moving consumer goods (FMCG) in total individual spending along with the large population base is another factor that makes India one of the largest FMCG markets.

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Change in Indian consumer profile Consumer profile

1999

2001

2006

Population (millions)

846

1,012

1,087

Population